Dianne recently received a substantial inheritance and is now keen to invest in a catering business. She obtains the advice of Smart Advisors Pty Ltd.

Smart Advisors assign Andrew as her advisor and after some consultation, Andrew recommends that Dianne invest in 'Feed Me Cafe'. Andrew assures Dianne that the cafe has a strong trading history and that its prospects are highly favourable. The caf is seeking investors to join the business so that it can expand into offering a franchise. Andrew assures Dianne that there are excellent profit prospects for the forthcoming year. Dianne relies on Andrew's advice and she decides that she also would like to invest extra funds to achieve an even greater return.

Dianne is excited by this opportunity and contacts a friend, Tina. Tina has poor health as well as a minor mental disability and depression. Following from the recent death of her father, Tina has been left unable to cope well in the wider community. Tina relies on Dianne for advice and support. Dianne asks Tina to lend her $30,000 in the hope that she will be able to double this amount for Tina. Dianne tells Tina that she (Dianne) would be really happy if Tina would provide her the money and so Tina gives Dianne the money. Dianne asks Tina to sign a document that states that Tina has provided Dianne with an interest free loan, to be repaid if and when the cafe venture succeeds to Dianne's satisfaction.

Within 9 months, Feed Me Caf is trading at a significant loss and Dianne has lost most of her investment monies. Around this time Dianne learns that Andrew provided his advice based on inaccurate and old financial information. She also becomes aware that Andrew had failed to advise her that the cafe was about to be penalised for a breach of their food license conditions. Dianne is very angry and upset. Tina's niece hears about Dianne's behaviour and insists that Dianne repay Tina, claiming that the loan agreement is not valid.

Provide Dianne and Tina with your advice about whether there is any action and against whom they may take it, giving reasons for your answers.